Phd Reports on Supply Chain Management by zoi11630

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									  Risk-Based Supplier Assurance
              A Missing Key
To Enhanced Supplier Quality Program Success


  Quality Assurance and Risk Management Services, Inc.
                  Robert J. Navarro, President & CEO
               A.A. Flippen, Director, Systems Engineering


                   University of Bradford, UK
              School of Engineering, Design & Technology
       Chakib Kara-Zaitri, PhD, Senior Lecturer in Risk & Reliability



                         September 28, 2008
         Presentation Objectives

• Quality & Risk Management Process Today

• Where We Want to Be

• How Do We Get There?

• Case Study

• Summary


                                            2
           Where We Are Today


You Are Here
                             Quality
                            Community


   • Quality System Elements
       –   Management responsibility
       –   Purchasing / Supply chain management
       –   Product realization
       –   Control of non-conforming products
       –   Etc.

                                                  3
        Where We Are Today

                           Risk
“They” Are There        Management
                        Community


                   NPR 8000.4 Agency
                   Risk Management
                   Procedural Requirements
                   - Includes supply chain risk

                                                  4
             Where We Want To Be

              Supplier                   Risk
              Quality                 Management
             Community                Community


• Integration of Quality and Risk Management
   – Current focus of this initiative on supply chain QA management
   – Supplier QA risks typically reported in supplier audit reports

• Transformation of quality audit deficiencies into a risk
  management framework

• Systematic reporting of supply chain risks as part of the
  program/project management councils (PMCs)
                                                                      5
             How Do We Get There?
                 An Approach for Integration

• Program/Project risk management is governed by the
  NASA Risk Management Policy NPR 8000.4
   – Includes the Continuous Risk Management (CRM) Process
   – The CRM process requires program/project risk management
     plans to provide definitions for likelihood and consequence ratings

• Apply these definitions to each supplier audit finding

• Map results in the traditional 5X5 Risk Reporting Matrix

• Report significant supply chain QA results as part of an
  integrated reporting process at program/project PMCs
                                                                      6
                         Case Study
Likelihood & Consequence 5X5 Matrix


               Likely to Occur
Likelihood




                     Probably

                   May Occur

             Unlikely to Occur

                  Improbable

                                 Very Low   Mod   High Very
                                 Low                   High


                                      Consequence
                                                              7
                        Case Study, cont’d
                                  Definitions
Likelihood
   A.   Likely to occur (e.g., probability > 0.1)
   B.   Probably will occur (e.g., 0.1 > probability > 0.01)
   C.   May occur (e.g., 0.01 > probability > 0.001)
   D.   Unlikely to occur (e.g., 0.001 > probability > 0.000001)
   E.   Improbable (e.g., 0.000001 > probability)

Consequence
   Very High -- A condition that may cause death or permanently disabling injury,
      facility destruction on the ground, or loss of crew, major systems failure, or
      vehicle during the mission
   High -- A condition that may cause severe injury or occupational illness, or major
      property damage to facilities, systems or major impact to project schedule
   Moderate -- A condition that may cause minor injury or occupational illness, or
      minor property damage to facilities, systems or minor impact to project schedule
   Low -- A condition that could cause the need for minor first aid treatment but would
      not adversely affect personal safety or health, damage to facilities, equipment, or
      flight hardware
   Very low -- Minimal or no consequences
                                                                                        8
                    Case Study, cont’d
An audit was completed for Supplier A. Selected results:

F1. Supplier A does not have a defined receiving inspection process to
systematically:
     – Verify the conformity of purchased products and services
     – Provide a traceable record of conformity including who, when, how,
       and to what criteria, conformity was verified

Project Risk
Purchased products may not meet technical requirements, and may have no
traceable record of conformity to requirements. Failures could occur
downstream and result in costly delays.

Consequence
High - A condition that may cause severe injury or occupational illness,
or major property damage to facilities or systems or major impact to project
schedule

Likelihood
C - May occur
                                                                               9
                  Case Study, cont’d
                 Transformed Supplier Risk

                  Supplier “A” Risk Report

               Likely to Occur
Likelihood




                     Probably

                   May Occur                      F1

             Unlikely to Occur

                  Improbable

                                 Very Low   Mod   High Very
                                 Low                   High


                                      Consequence
                                                              10
                     Case Study, cont’d
F2. While performance history is cited as a basis for approving suppliers,
there appears to be no defined process for reporting supplier deficiencies that
could affect supplier approval status.

Project Risk
Repeat problems with subcontracted and/or purchased products. Initial
supplier deficiencies may not be recorded and/or addressed with appropriate
controls.

Consequence
Moderate - A condition that may cause minor injury or occupational illness, or
minor property damage to facilities, systems or minor impact to project
schedule.

Likelihood
C - May occur

                                                                              11
                   Case Study, cont’d
                 Transformed Supplier Risk

                  Supplier “A” Risk Report

               Likely to Occur
Likelihood




                     Probably

                   May Occur                F2    F1

             Unlikely to Occur

                  Improbable

                                 Very Low   Mod   High Very
                                 Low                   High


                                      Consequence
                                                              12
                     Case Study, cont’d

F3. It appears that there is no defined process for reviewing controlled
documents to determine whether updating is needed.

Project Risk
Incorrect builds, tests and inspections could occur due to use of outdated
material and process specs, and manufacturing and QA work instructions.

Consequence
High - A condition that may cause severe injury or occupational illness, or major
property damage to facilities, systems or major impact to project schedule

Likelihood
B - Probably will occur




                                                                              13
                   Case Study, cont’d
                 Transformed Supplier Risk

                  Supplier “A” Risk Report

               Likely to Occur
Likelihood




                     Probably                     F3

                   May Occur                F2    F1

             Unlikely to Occur

                  Improbable

                                 Very Low   Mod   High Very
                                 Low                   High


                                      Consequence
                                                              14
                         Summary
• Supplier risks can and should be integrated into the NASA risk
  management program defined in NPR 8000.4 (new revision in
  NODIS review)
• A systematic and practical risk-based supplier QA process
  can be applied
   – Integrated quality and risk management
• Supply chain risks are a critical element of the integrated
  project risk profile
• Next steps
   – Field testing for practicality
   – Program and project feedback



                                                                15
          Where We Want To Be


          Supplier             Risk
          Quality           Management
         Community          Community



                      Contact
RNavarro@QAandRM.com

Chakib@NTLworld.com                      16

								
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